Wednesday, 28 June 2017

MENA Hospitality Revenue Slumps

The majority of the MENA hospitality industry experienced a decrease in earnings during May 2017 as both lower occupancies and lower average room rates reduced overall revenue per average room (RevPAR), EY said in its latest MENA Hotel Benchmark Survey Report.

Abu Dhabi and Dubai maintained strong occupancy levels at 73.5 per cent and 77.8 per cent respectively but witnessed a decrease in RevPAR when compared to the same month last year.

Dubai’s hospitality market saw a decline in RevPAR by 11.6 per cent in May 2017, mainly due to the reduction in average daily room rate from $225 in May 2016 to $211 in May 2017.

Furthermore, Abu Dhabi’s hospitality market witnessed a drop in RevPAR by 20.3 per cent from $92 in May 2017 to $73 in May 2016.

The decrease was mainly due to the average room rate being lowered from $119 in May 2016 to $100 in May 2017, along with a decline in average occupancy by 3.8 per cent when compared to May 2016.

In Saudi Arabia, Jeddah saw the highest occupancy rates for the region at 80.2 per cent and the highest RevPAR at $247 in May 2017. Moreover, the hospitality markets in Madinah and Mecca experienced positive gains in RevPAR this month when compared to May 2016.

Madinah’s hospitality market witnessed an increase in average occupancy of 6.1 per cent in May 2017 when compared to the same period last year. Average daily room rates also increased from $179 in May 2016 to $180 in May 2017, resulting in an overall boost in RevPAR by 12.2 per cent from $92 in May 2016 to $104 in May 2017.

In May 2017, Mecca’s hospitality market witnessed an increase in RevPAR of 90.5 per cent when compared to the same period last year. The rise was mainly due to the average room rate increasing from $142 in May 2016 to $275 in May 2017.

Mecca was able to maintain occupancy levels of 41 per cent year-on-year.

“The increase in Madinah and Mecca’s hospitality market may be attributed to the beginning of the holy month of Ramadhan where many worshippers prefer to perform Umrah and visit Madinah,” commented Yousef Wahbah, MENA Head of Transaction Real Estate at EY.

Elsewhere in the MENA region, Cairo’s hospitality market witnessed a decrease in occupancy by 10.1 per cent from 74.4 per cent in May 2016 to 64.3 per cent in May 2017.